Forecourt prices have seen their biggest monthly leap in a generation
according to the AA, with the cost of filling a tank of unleaded rising by
£3.07.

The motoring organisation's latest analysis shows that a combination of higher taxes and higher oil prices on the world markets added 6.13 pence a litre between mid-December and mid-January, taking the price to 128.27.

It represents the largest leap in petrol prices since the oil price shock triggered by the 1973 Yom Kippur War in the Middle East.

The rise, which has continued since the report was compiled with the latest pump price reaching 128.33 pence a litre, led the AA to question whether motoring will be within the reach of most people as petrol inches towards the £6 a gallon figure.

Diesel prices went up 6.56p a litre, from 126.19p a litre last month to 132.75 by mid January.

The rise in the cost of oil on the world markets has meant that the cost of filling a car increased every day over the past month.

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The latest figures will intensify pressure on the Coalition to introduce a Fuel Stabiliser, promised by the Conservatives before the election, which would see taxes cut as fuel prices rose.

"Our research shows that a two-thirds of drivers are cutting back on car use, other spending or both," said Edmund King, the AA’s president.

“Unless the Government can restore a more affordable level of fuel prices, by scrapping the fuel duty increase in April and bringing in a fuel price stabiliser, the tax return from constantly rising prices will reduce the income to the Treasury as motorists leave their cars at home.

"Sooner or later, politicians will have to face reality – more and more drivers cannot afford these prices, they are pushing up inflation and taking money from other consumer spending.”

This time last year petrol was 16.3 pence a litre cheaper and diesel cost 18.98 pence less. It has added £8.15 to the cost of filling an average tank with unleaded and £9.49 with diesel.

For a two-car family, the monthly cost of petrol has increased by £34.61.

Much of the latest rise is due to higher taxes with a 0.76 pence a litre increase in fuel duty on Jan 1 and the 2.5 per cent jump in VAT alone adding 2.5 pence to the pump price.

Motoring groups fear there is more bad news on the way with speculators trying to push the price of oil even higher.

Already there are signs that motorists are cutting back, with forecourt sales down nearly 13 per cent over the first nine months of last year.

This in turn could hit the Treasury which would see revenue from motorists fall as they drive less, even though it is cashing in on higher oil prices through taxes paid by companies operating in the North Sea.

The rising cost of diesel is hitting hauliers and farmers, triggering fears that there could be a repetition of the 2000 fuel price protests unless the Government provides some relief.